20
Examination of witnesses
Dr Jo Twist OBE, Catherine Allen and Verity McIntosh.
Q30 The Chair: This is the Communications and Digital Select Committee. For those in the room, we are transmitting live on the internet. A recording of this session will be made, together with a written transcript, and both of them will be available on our website soon after this meeting.
We are currently conducting an inquiry into the future of the creative industries, how technology, in particular, is impacting them, and how they can take advantage of opportunities and avoid disruption that could damage the industry’s and the UK’s standing. We had a session on Tuesday that was all about the performers, artists and creators. Today is more about audiences and the way technology is impacting their experiences and the direction that we are going in with some of this technology.
We have two sessions. Our first panel members are experts on immersive technologies, extended reality and the metaverse. We hope to explore the impact, the opportunities and how much some of what we hear is hype. I hope that you will be able to be frank with us. The second session will be about digitalisation and data in the creative sector.
Panel, can you introduce yourselves, please, and the bodies that you represent? If you could very briefly say what you and your organisation are expert in, it would be helpful for us but also for people watching this.
Catherine Allen: I am CEO and lead consultant at Limina Immersive. My career in virtual reality started when I produced two of the BBC’s first public-facing VR experiences. I have lots of experience in the field of virtual reality, but also augmented reality and immersive media more broadly.
After producing those experiences, I set up my company, Limina Immersive. We are a consultancy and research organisation now, but pre pandemic we used to run, as part of our research, lots of events to get virtual reality to broader audiences who reflect the population more than early adopters. I also have a great deal of experience in that relationship between immersive technologies and society, the impact that it has on society and how people feel about it.
More recently, since about 2020, we have been focusing on research and consultancy. I have authored a range of reports, including Safeguarding the Metaverse, which was commissioned by the Institution of Engineering and Technology; I actually co-authored that with Verity McIntosh here. At the moment, we are writing a report for the NSPCC. We are looking at a study into the impact of AR and VR on children and children’s lives.
Dr Jo Twist: I am the CEO of UK Interactive Entertainment, which is the video games and interactive entertainment trade body in the UK, with a mission to make the UK the best place in the world to make, sell and play games.
My background is that I did a doctorate on online communities, identity and young people in the 1990s when it was chatrooms and things like that. I have been a tech journalist and I have also commissioned content for multiplatform entertainment and all sorts of things throughout the last 25 years. I am delighted to be here.
Verity McIntosh: I am a researcher and senior lecturer in virtual and extended realities at the University of the West of England, which is in Bristol. I run one of the UK’s and Europe’s first immersive master’s programmes, and I am a researcher primarily looking at user experience design, ethics and the simulation of risk in virtual reality.
I work a lot with industry partnerships. I am currently working on a lot of industrial use cases, including the Sellafield decommissioning proposition going on with robotics and virtual reality. More relevant to this panel, I am working with a number of the UK’s leading immersive content producers, particularly in the arts and cultural space, looking into all sorts of different questions about audience experience and ethics and how we can drive the adoption and the responsible usage of these immersive technologies across the UK ecosystem and beyond.
The Chair: Thank you very much to all three of you for being here. We are very grateful to you.
Q31 Lord Hall of Birkenhead: To start off with a broad picture of how you see audiences using VR but also AR, experiences you may have about how one differs from the other would be really useful. Although the potential is clearly huge, we all have some caution of late when you look at what people are saying about Meta and Mark Zuckerberg’s lunge into the metaverse. I remember well 3D being something we all thought was going to be very big; we know it has not worked out quite like that. Distinguishing reality, or virtual reality, from hype would be really important this morning.
The first question is about how these extended reality technologies are changing the way that creative and cultural content is experienced by audiences. I wonder, Dr Jo Twist, whether we could start with you, because it strikes me that games, and the immersion in games, is ahead of most other areas.
Dr Jo Twist: That is right. The games industry is around 45 years old. The UK is one of the birthplaces of the games industry. It is a tremendously successful and valuable part of the creative industries as well as the tech industries in the UK, so we have a lot of heritage and expertise in creating immersive experiences in these kinds of worlds.
A lot of the technologies and techniques that we use in storytelling and creating these incredible environments combine artificial intelligence and procedural generation, and also then spill out into other sectors. Of course, we have had great success with augmented reality games such as Pokémon GO, which, as you know, got a lot of people out and about, enjoying the physical world around them and meeting new people.
There is so much potential. There is incredible potential to extend that expertise and those skill sets in creating more interactive experiences, particularly in heritage sites and cultural institutions. There is a great example of the National Gallery with the Keeper of Paintings, which is fantastic. You see the joy on children’s faces in the National Gallery as they are going around and playing these games. We know that these technologies can really bring alive cultural content as well as cultural experiences and physical sites for a much wider range of audiences than you would typically have. Generally, interactivity does boost engagement, and that in turn allows new generations and new audiences, who might not think culture and creativity is for them, to enjoy and be inspired.
Otherwise, these technologies are also extending to reach people who might not have the ability, physical or otherwise, to travel to particular cultural sites or enjoy these experiences. We all know the important role video games played during the pandemic for people to connect together across generations and enjoy, in a safe way, being together digitally.
Ubisoft, a great company that I am sure you will hear more about later, created, through its game, a discovery tour of Ancient Greece for schools during the pandemic, which is incredibly powerful for young people. These technologies are additive to the ways in which creative and cultural content is experienced. The worlds and stories that encourage you to explore are incredibly important for this and all generations.
Lord Hall of Birkenhead: I went on a VR tour of a reef before and after it had blanched. You never forget it. Those experiences are absolutely unforgettable.
Dr Jo Twist: I just want to add one point that is really important. Video games are giant simulations of reality as well. They can be harnessed to model environmental impact and to really bring alive important topics to people so that they care more.
Lord Hall of Birkenhead: Catherine Allen, you have a lot of experience of bringing immersive technology to audiences. How are they changing what audiences want and can expect?
Catherine Allen: Just to roll back to one of your first questions on what makes immersion different, it is really hard to explain without trying it, especially virtual reality. At its core it allows for doing, or simulation, as Jo said, rather than just viewing. That means that you can be in the story. You can experience something directly. If it is a performance, you can have the best seat in the house. If it is a VR documentary, you can meet the interviewee directly. You feel like you are getting to know them. You can see a coral reef up close, for instance. It allows for that very direct feeling, and that can even change someone’s perspective on something. It can change their view on a topic.
There really is this opportunity for a whole new art form that is opening up in its own right. It is new. It is novel. That is AR. That is VR. That is mixed reality. From an art form perspective, the closest thing is probably immersive theatre.
Coming back to your question about gaming, most of these experiences are made in a games engine, so we are inherently tied to the games industry. Although this is so relevant to many different sectors, the beating heart of AR and VR is in the creative industries because it requires gaming, visuals and animation, and because the end result is like immersive theatre. Although AR and VR can be discussed as something that is super-techy and from the world of Silicon Valley, more than something we would be discussing here, that is not the case. As we know, Britain has a fantastic creative industry. That is one of the reasons why we are really excelling in the field of AR and VR.
In terms of how that is changing audience expectations, the idea of immersive entertainment, both inside and outside the home, is becoming much more normalised. For instance, it is becoming much more standard to go out on a Tuesday night and experience an immersive exhibit, or to go to a virtual reality arcade, or to go to your local theatre where a VR experience is being put on. Audiences are thinking immersively. In the last five or 10 years, there has been a really major shift to doing, not just viewing.
Lord Hall of Birkenhead: Verity McIntosh, you have been working with artists, creative companies and tech people. You have seen how that interacts. Again, what are the lessons for the way this is creating new demands from audiences or enhancing existing demands?
Verity McIntosh: That is a really good question. One of the things that we have observed in the last five years is, as Catherine and Jo are illustrating, that there is a massive appetite within audiences, particularly from the arts and cultural sector, to engage with these kinds of novel experiences, and to connect with arts and culture in different ways, particularly when they are not able to attend those extraordinary institutional buildings that we are so familiar with. We can expand the audience potential for connection in different ways.
During the pandemic, the UK immersive ecosystem actually blossomed. One of the findings from a report that is being published on Monday by Immerse UK, which I recommend you check out, is that it is one of the very few industries that saw significant growth as a response to the pandemic. People were not able to travel or were not as comfortable being in these collective public spaces as they might otherwise have been as audiences. That has not slowed since there has been an unlocking of pandemic restrictions. We are now seeing a different mode of audienceship that is embracing some of these hybrid experiences.
Along with that, we all know a bit about things such as Zoom fatigue and the difficulty of engaging with arts and cultural content on flat screens. There is often a dip in engagement or interest when live and creative encounters are reduced to a flat rectangle, whereas when you move into immersive spaces such as virtual reality and augmented reality, we are seeing a massive growth in audience engagement in those much more spatial, dynamic, interactive spaces, in which people can feel that they are part of a story. They are in the centre of their own movie. They are a leading protagonist within these cultural contexts. A whole new mode of audienceship is opening up.
As you probably imagine, there is a particularly swift uptake within the younger generation, but some of the research that Catherine can speak to more readily has suggested that one of the largest audiences has been in females over 60 years old. There is a real spread of audience adoption, depending on the type of cultural content that is offered and the context in which it is being presented.
Lord Hall of Birkenhead: You have spoken about gaming through to culture and arts. Jo mentioned spillover. With the way that you are all working and the contacts that you have, can you see areas beyond arts and culture where immersive technologies, from the audience point of view, are going to be valuable?
The Chair: In your responses, could you also touch on whether you have a view as to why this is not taking off in the film industry?
Lord Hall of Birkenhead: We remember 3D.
Dr Jo Twist: The other experts will have much more to say on this than I do, but we know that these innovations are spilling over to audiences for therapeutic treatment, Alzheimer’s treatment or medical training. Training in VR and immersive worlds is incredibly important, again extending the reach of education beyond traditional physical barriers. The other experts could probably talk more on that.
Catherine Allen: When I was at the BBC I really noticed, as a producer of immersive experiences versus my friends and colleagues who were working in more rectangular media, as I call it, the difference in our approaches. I was very interested in what I would now call story-doing. They were very interested in being amazing storytellers. Immersive media and traditional 2D media are actually quite different. Story-doing is where you create an environment and a space for your audience to enter and have their own experience that they can take away with them. It even shapes their identity and who they are. It can shape their attitudes, values and beliefs.
We came to really respect each other’s craft, but they are different. From the film industry, there can be an assumption that what audiences really want is storytelling: “They just want a great story told, and we can do that through immersion”. When you look at it from a different perspective, learning from immersive theatre or gaming, that is where a different opportunity lies.
Jo mentioned purpose-driven opportunities for this medium and I feel, from my experience, that some really tangible benefits for Britain and the British economy can be when you are looking at creative content for something with a clear purpose, like therapy or healthcare. There have been studies that have shown that people’s sense of pain has been reduced using virtual reality. I could give you many examples that I can send on afterwards if you would like. There are many studies there.
There is also remote working, opening up opportunities for people to live in more rural areas and smaller towns. There is incredible opportunity. We have talked about this a lot in relation to in-location cultural entertainment, theatrics and story-doing, but these are still part of the creative industries. We can also look at applying this immersive creativity to healthcare, learning, education and remote working.
Lord Hall of Birkenhead: That difference between story-doing and rectangular people and storytelling is very neat.
Verity McIntosh: I would like to come to the question of the film industry that was raised, because it is a really good one. I would push back slightly and say that film, broadcast and areas of journalism and documentary were incredibly quick to start experimenting and investing. A lot of people from the screen media, particularly in the UK, through institutions such as StoryFutures and StoryFutures Academy, run at Royal Holloway, have been trying to actively upskill screen media in the UK to embrace some of these new affordances and make content.
Most of the international film festivals now—Venice, Cannes and all the rest of them—will have a parallel strand that is all about showcasing the best and brightest in immersive media. The UK is massively overrepresented in those international forums. We are known as really strong content creators, and that is partly because of that investment in translating across from film to immersive.
The reason it is not hitting where you are expecting it is because, beyond the film festivals, there is no infrastructure for that work to meet the audiences. Beyond Catherine’s VR theatres and travelling events, there are very few places where you can reliably expect to encounter immersive content that is high quality and well invigilated. It is quite a particular thing to put audiences into a headset. In particular, there is a lot of duty of care and upskilling that has to go on for cultural institutions to do that responsibly. It is also not a particularly high-traffic activity to do if you can only do six people at a time.
What we are not doing in this country—other countries that we may speak about later are getting a little ahead of us in this—is enabling our existing cinemas, theatres and cultural institutions to be able to create the programming within their own cultural offering and to have more bespoke spaces that can accommodate these kinds of immersive experiences. The appetite is there from audiences. Every time we do anything, we are oversubscribed, but our institutions and our ecosystem are not there to be able to go from the showcase moment at a festival to distribution across the UK.
Q32 Baroness Rebuck: I am interested in this technology barrier. It is sounding as if it is both in the place itself but also the provision of the glasses that do not feel too heavy or cumbersome or whatever. Internationally, what does the development of the technology look like that will hopefully enable a more mass introduction of these really important experiences?
Dr Jo Twist: It is a bit like mobile phones, with the old bricks that we used to have to cart around and how they have reduced in size. It is so much better. The improvement and also the cost of the technology are constantly evolving. During lockdown, my team did not use our training budget, so we instead bought Oculus Quest 2—other devices are available—which does not require the same set-up or a powerful computer. It is cableless. It is still a bit heavy, but the innovation in the hardware is getting there. It is the price of a smartphone.
In terms of innovation, there is going to be a lot more when it comes to wearability and accessibility, but there are still accessibility issues on the consumer side that we need to consider. Accessibility in the metaverse, however you define that, is going to be something that the UK can lead on. If we make the metaverse accessible, everybody wins.
Catherine Allen: There is a report that I wrote for Nesta’s policy and evidence centre called Beyond the Early Adopter. It looks at barriers to adoption and, when we are appealing to more mainstream, broader audiences with virtual reality devices, how we can cross the chasm between the early adopters and the early majority. It is really difficult.
What we found from quite a few years of research is that, yes, the headsets are clunky, but actually the cultural ideas and stereotypes around these devices come into it as well. It is about how people feel about putting on a headset and the nervousness if they are not used to it, especially if they do not have experience with console games, where a lot of the mechanics of the interaction come from. People can feel nervous. If you think, “This is not really the sort of thing I do. Maybe it is more something my teenage son would do”, that can make you feel that it is not your space. This can be countered through different forms of marketing and, as Verity mentioned, the duty of care in how it is presented to people.
Q33 Lord Vaizey of Didcot: There is so much to unpack in this issue, but you talked about buying everyone an Oculus Quest. You did not get me one, but we will leave that aside. Mark Zuckerberg has just launched the next iteration already, so the obvious question is about who is going to drive innovation. It is going to be mainly the usual suspects. It is going to be the Metas, Googles and Amazons. What kind of role can public institutions play in driving innovation and, indeed, adoption? I will start with you, as I tried to badly embarrass you about not buying me an Oculus.
Dr Jo Twist: That is absolutely fine. We are recruiting if you would like to be part of the team.
It is about civility, safety and privacy. We know a lot about this, particularly because we have a very rich heritage, as you know, in the video games industry. We have a different relationship with our audiences—who we do not call audiences but a community. We do not call them consumers or users. We are not social media platforms. They are not there to be monetised in the same way. We have a lot of experience in how we build these spaces.
Lord Vaizey of Didcot: “We” the UK?
Dr Jo Twist: Yes, we the UK. Spaces need to be civil, inclusive and accessible. These are the requirements that we absolutely need public institutions to be holding companies to account on, because that is how they will become inclusive spaces. That is how we will take advantage of the opportunity as people who want to enjoy the experiences in these worlds. The games industry is all about enjoyment and making people feel safe, because that is what we want. That is what I believe the role is.
Lord Vaizey of Didcot: Tony Hall is here, but you worked for the BBC as well. In terms of UK plc, can public institutions such as the BBC or indeed museums play a big role in advancing the technology?
Catherine Allen: Yes, very much so. It is a very important point you raise about broadening audiences and those barriers to adoption. We have to do it, because something important to this inquiry is looking at talent pipelines. I know this is obvious, but the industry and workforce of the future is made up of the audience and users of today. If we do not address broadening who those users are, we are going to have a very homogenous industry of the future, so it is really vital.
Lord Vaizey of Didcot: You are confident that that is happening and that we are breaking out of the usual audience suspects adopting this technology.
Catherine Allen: We are up against lots of marketing internationally. When you actually look at the statistics around the people who are using the headsets, it tends to skew towards young men. There is a recent YouGov report out a couple of weeks ago about this, which you can look at, but Limina’s own research shows this also. In 2021, our own tracker showed that usage of virtual reality headsets at home doubled. The pandemic probably had something to do with it, but a lot of that was driven by young men. The heritage and marketing of the games industry, especially console games, has probably come into that. There is nothing natural about how that has turned out. We have this situation where, because of the games industry and the issues we already have around inclusion and demographics, it tends to be that quite narrow audience of people at home.
When a British cultural institution is putting out an immersive experience, it can be a bit of an uphill struggle to say, “No, this can be for a broader audience”. I would really push for more funding in that space. Audience of the Future was really wonderful as a fund and as an initiative because it put a lot of money into R&D, but a lot of the funding, apart from the really big projects, was smaller pots for R&D; it did not address that audience challenge. If there was funding around the “what next?”—how we can get this incredible content we are creating in Britain to broader audiences in a way that is not a one-off but with a systematic distribution mechanism that can really last—we could be in for something really fantastic. It could really make us stand out.
Dr Jo Twist: Although I would counter that, according to some of the statistics around who plays games, it is absolutely 50-50 between male and female. The average age is 35. The fastest-growing demographic is women over 40. There are sometimes stereotypes that need to be institutionally blown away.
Catherine Allen: There are the stereotypes and heritage of gaming that seem to have a knock-on effect on virtual reality at the moment. That is my analysis of one of the reasons that we have quite a homogenous group of early adopters of virtual reality.
Lord Vaizey of Didcot: To bring Verity in as well, in terms of what Jo was indicating earlier about the UK as a regulator, if you like, setting standards, are there opportunities for the UK to get ahead of the game in terms of skills, investment and R&D? We know this is coming.
Verity McIntosh: Yes, absolutely. The wording you used there about being a regulatory body is really important. We are at a specific moment in time now. You have rightly identified that a lot of the global motivators have come from the big tech companies, the big five in Silicon Valley, in terms of hardware and investment. The cultures we are now hearing about in these sorts of committees and trying to get ahead of, which are around the commodification of data and the exploitation of user behaviours, are in danger of just travelling into this next paradigm by default, because the business model of these companies is about data extraction and data commodification. If this sector is led only by the Metas and Googles of the world, that will happen by default.
It is not inevitable at this point. With conversations around regulation that are happening around the world, and with the question of decentralisation and how that is going to play in, there is an opportunity to create a 21st century culture around these new technologies that does not just have to inherit the toxicity from Web 2.0. A lot of that will come down to what we do with things such as the Online Safety Bill, how we hold companies accountable and, to an extent, not accepting the fact that immersive technology is a goldmine for data enthusiasts, which it is.
Just to backpedal a little, the reason this is a really appealing proposition for Meta and others is that the data available about users suddenly shifts from, “What do I click on? How long do I spend here? What do I swipe? What do I share?”, which is useful, to, “What am I looking at and for how long? What does that mean about what I care about? Do my pupils dilate when I look at that? What do I say to you? What do you say to me? What do you then say to someone else?” The behavioural data available, particularly through these social virtual reality encounters, and the absolute richness of that data as we move into a world of augmented reality—excuse me for jargoning—is spectacular for a data capitalist.
It is not reasonable to assume that data belongs to those companies just because they are doing the early investment in the hardware. The decisions that are made in rooms such as this in the next two years are going to make a big difference to whether that business model proliferates or whether there is an ability for others within the marketplace to come in and offer alternatives. If we do not want innovation to come only from Silicon Valley and for users to be commoditised by default, there have to be some decisions made about how we understand privacy and data rights, and how we create a more accessible, inclusive marketplace that can be moved into by companies from around the world, empowering users to operate within those spaces, without the presumption that to do so is a parasitic endeavour.
Q34 The Chair: Is one of you able to offer a view on how well the UK digital businesses in this area are taking advantage of or indeed have new commercial investment available to them? We know the potential value, and indeed the current value, of all of this globally and in the UK. I just wondered about the UK’s ability to take advantage of that potential. We will come back to data later on, because that is really important. Is there anything on the investment and the funding stream that is either available and not being taken advantage of or is just not there?
Dr Jo Twist: I can give our view. We have 2,500 games companies in interactive entertainment that are doing VR and AR in the UK, but 95% of them are SMEs; they are very small. One of the biggest barriers at the moment is talent. We are all in competition with fintech for the same kind of talent. We are in competition now with other sectors that are adjacent to us because of virtual production techniques. We are not seeing the flow of diverse talent—people who are going to create these incredible experiences that appeal to different audiences. We are not seeing that come through. This a global issue; it is not just a UK issue, but that has been exacerbated, unfortunately, by Brexit, which has prevented the free movement of people across Europe.
We are well placed. We have seen a record amount of investment in video games companies, in the kinds of companies that are creating these kinds of experiences, over the last two years. Over the last five years, it is over £7 billion in investment and acquisitions. That has been a real shift over recent times, which we did not see previously.
However, there is not really access to funding for risky content. It might be stories and experiences being created by underrepresented groups who are diverse and who want to tell different stories and bring those experiences to new audiences. There is no BBC equivalent for games companies or companies that want to make that kind of content. There is an opportunity there.
We are grateful for the video games tax relief, which, as it does across the other screen sectors, incentivises the production of cultural content. It is utterly critical to our future and current growth. We are also very grateful for the extension and investment of the UK games fund for prototype funding, but that is about it. When it comes to that kind of funding, if we want that diversity of content and experiences to appeal to different audiences, we need better routes to funding to really take advantage of this opportunity.
The Chair: Aside from any public subsidy or tax relief, is the City willing to invest in your businesses?
Dr Jo Twist: The City has become extremely interested because a bunch of tech bros are talking about the metaverse. That is great. Everyone is very excited about crypto and NFTs and where this leads. I get concerned that is not a sustainable route. There is more confidence now in video games companies, for instance, from investors, which is very welcome, because games now are more of an ongoing service and creative product. So we have seen a shift but we are in for some potentially interesting times.
Catherine Allen: I note, on investment from outside of London, that some research was done in the south-west on barriers to immersive companies getting investment. It was done by SETsquared as part of round table sessions. They found that a lot of the barriers to investment are around the angel investors at the smaller scale of seed funding tending to invest in areas that they know. When you have this really new space, how can they feel comfortable investing? There can just be that knowledge gap. Running virtual reality events and showing virtual reality to them, improving immersive literacy among those smaller-scale investors, could actually be a really great way forward.
Verity McIntosh: Just to add a little bit of data, the Immerse UK report on Monday has been looking at private investment in immersive companies. We have seen 83% growth in immersive tech companies in the UK in the last five years. Private investment in those UK companies is also growing. The latest figures that they had were that there was £224 million invested in 2021. That was specifically private investment in immersive companies, and that is looking like it is going to double this year. So it is still quite a small amount, but it is on a significant growth curve.
One of the things that does not get discussed in the report, which is perhaps anecdotal from the companies I am working with, is that a lot of that private investment is having to be found overseas. The companies are still staunchly basing themselves in the UK and trying to capitalise on the opportunity to have that convergence between the arts and the tech sector that we are very good at in this country, but often they are finding a massive issue with talent drain.
The two biggest barriers identified in this report are access to finance and access to talent. Sometimes the companies that are hanging on in there in the UK are still going largely to the US, Canada and China. We are seeing a difficulty in the volume of investment available, the understanding of investors in this immersive space and the access to talent within the UK ecosystem, which is creating a bit of hesitancy in that investor landscape.
Q35 Baroness Bull: You have already covered some of the aspects of what I was planning to ask, which was around the challenges and risks involved with the expansion of these technologies. You can think about that in two ways. You have talked a lot about the risks that might prevent expansion, such as skills and investment. I am really glad you brought up talent pipelines, because that is key and might be good to touch on again.
Let us assume expansion. Let us assume these things do take off. What are the risks involved? I am thinking about who gets excluded. Of course, you are all talking positively, and we share your positivity about the impact of these technologies, but let us put the negative hat on. What are the risks of seeing this expand? Who misses out?
Catherine Allen: I would refer you as well to the Safeguarding the Metaverse report that the IET commissioned, which Verity and I co-authored, and the importance of asking that question and asking it now. I was quite surprised, at the end of last year and the beginning of this year, when pitching this report to the IET, that when we were starting to have conversations with policymakers, politicians and government departments, even though there had been tens of millions of pounds of funding going into the immersive sector through Audience of the Future and creative clusters, there was so little conversation about the risks, which seemed really strange. It is not for lack of funding that this sector has not appeared to be thinking about it. That is one thing. There was an issue.
However, having had it confirmed, as has been said quite a few times now in the Lords and in the Commons, that AR and VR are included in the Online Safety Bill, that puts us in a really good position in comparison with the rest of the world in thinking about regulation. I am now part of various working groups of different law enforcement organisations and government departments, where they are really waking up, having seen this report and some great work that others have done as well, to looking at this right now.
We have this golden window of time and this opportunity. It is important enough that we need to be thinking really seriously about regulation. As Mark Zuckerberg said in a recent podcast, the level of adoption of the Meta Quest 2 is similar to Xbox or a PlayStation. You have this level of adoption that is high enough that it is important, but at the same time you also have a malleability that still exists, because it is still emerging. The scale is not at all anything like the level of social media yet, so it is a golden window of opportunity to ask that question: what are the key risks? Maybe I will hand over to Verity now.
Verity McIntosh: Let me do some naysaying. We have talked a bit about data, and there is a big conversation there that we can return to. One of the really concerning areas that we have seen through our research—you may have seen various investigative journalism pieces through Channel 4’s “Dispatches”, the BBC’s inquiry and others—is that, particularly as we move from these experiences being one at a time, personal experiences, to more what you might call “metaversy” spaces, where there are people co-located in a digital space together, we are seeing an almost endemic proliferation of harassing behaviours.
When there are these multiperson, unregulated, unmoderated spaces, that is what we are seeing. The Centre for Countering Digital Hate did some research and decided that you can expect to be harassed in one form or another every seven minutes, and that goes up exponentially if you are presenting as female, as a child or as a person of colour. The proliferation of hateful and harassing behaviours in these open, unmoderated spaces is becoming almost the culture of these metaverse spaces.
From a purely economic point of view, that will absolutely create market flight. Nobody wants to go and be harassed on a regular basis, but it is not being particularly well addressed by the providers and platforms. There is a worry coming up in our research that, if they overly police these behaviours, they will lose the audience that they have, so there is a reluctance to create any form of feedback loop or accountability for these negative behaviours. These are very different to experiencing trolling and griefing behaviours online and in the square format games, because of the things we were talking about before: this enhanced sense of presence and feeling that you are physically with someone because of the spatial dimensions of these technologies.
We have seen this time and again in psychology research from the 1960s, 1970s, 1980s and particularly the 1990s, when we really understood the psychological impact of being in these simulation environments. You quite quickly forget that you are not physically there with someone, so when they invade your personal space, shout at you or simulate behaviours that you might not appreciate and that, in physical space, would be unquestionably harassing behaviours, this can be highly traumatising when experienced in virtual reality. It can be deeply upsetting and, in many cases, qualify as illegal behaviour. We are increasingly working with law enforcement, Ofcom, the Information Commissioner’s Office and so on to understand where criminality exists within these harassing behaviours.
Dr Jo Twist: That is so important, and that is where we can become leaders, because the games industry does have techniques around best practice on how to have friend spaces. As a team, we never go into the public spaces in virtual reality. We go as a team with our friends, and you create your friend lists and so on. It is about sharing that best practice and that experience. I am sure that is covered in the report, because those are the techniques that we have learned over the past 35 or 40 years of being in MMOs—massively multiplayer online games.
There are techniques but, crucially, it is also about education right down at school level. Through research we have done in our education projects, we know that children who play online games are much more adept at understanding how to protect their privacy, and how to protect themselves in other digital arenas. Again, it is harnessing the experience and the reality that young people, children and adults are already in these spaces, but understanding how we make sure of that best practice on how to inform and empower people so that they can take control themselves and have a good time in these places.
Baroness Bull: That is really helpful. I am glad that you took that angle about risk and safeguarding. In terms of other challenges, have we touched on all the groups that might be excluded from playing? Are there other exclusions that we should be aware of?
Catherine Allen: If you look at who experiences digital exclusion anyway, there is still quite a proportion of the UK population who are not on the internet, so of course we have these groups. From the research that Limina has done, when we used to run virtual reality events, we had this VR theatre experience where people could come and collectively experience an immersive night out with their friends and family. We learned a lot about who feels excluded and why, because often they would tell us afterwards, “This was great. I didn’t think it was for me beforehand but now I know it is”. Overwhelmingly, women would say, “I thought this was something for teenage boys. I thought this was a boys’ toy”. It was really rewarding to see how easily you could change that with a different marketing style, and not a stereotypically ‘girly’ marketing style at all. Just the way you market and the language you use can make a huge difference.
Age is also a factor, with people tending to feel that this is something for teenagers and young people, meaning that they can self-exclude. They sometimes think, “I do not have the digital skills”, when in fact, if you have experienced VR, you will know that it can be a lot easier and more intuitive than using a standard computer. It is often more about perception of digital skills than the actuality.
Verity McIntosh: You asked a brilliant question about who is being excluded. There is a really practical exclusion that happens with the way that the hardware is currently designed. We have even seen silly things like how having an unremovable strap across the top of your head will often exclude people with afro hair. For people who use wheelchairs, often the musculoskeletal assumptions about your spine and neck strength are really precluding participation. It is largely being solved, but there were early problems with the presumed line of sight being a six-foot-tall person, so if you are in a chair, you are on the floor.
The Chair: That excludes me then.
Verity McIntosh: There are some really obvious blind spots that the designers of these technologies are just not acknowledging, or not acknowledging the need for. That makes it feel like it is for a protected group of 22 year-old white men.
Baroness Bull: Tall white men.
Verity McIntosh: Very tall white men, yes. The optical illusion that virtual reality gives you is based on where two lenses are in front of your eyes. If you, usually for reasons of ethnicity, have eyes that are slightly wider or narrower than these headsets are presuming, you are fresh out of luck. There is a personalisation to it that involves the bridge of your nose, the width of your eyes, the style of your hair or whether you use a headscarf. At the moment, all of these things are making it more and more difficult to participate, and making it feel like it is not for you.
If people are being left out on that scale in these early stages, they will not be influencing the design of the future technologies, so we do have an issue around diversity and inclusion in terms of the basic things such as how the kit is made.
Catherine Allen: You have opened a Pandora’s box. One reason why people will not put the headset on is sometimes because they do not trust it. They just say, “I don’t trust this. I will not put it on”. Coming back to the Online Safety Bill, trust can equal adoption of technology.
The Chair: I do not know whether you are going to come on to this, but there is also an issue here about the way in which some of this is designed to incorporate the disability access issues in technology as well.
Baroness Bull: I do not know whether you wanted to follow on.
The Chair: It was just to get on the record that there is an issue here about the alignment, at the point of design, with the special needs for disabled access in terms of the technology, which is slightly different from what you have just been saying. That was all.
Verity McIntosh: On a positive note, there is some fantastic research within UK higher education authorities, and lots of PhD students are looking into things such as audio description for virtual reality and various sensorial ways of experiencing immersive content. We are well positioned to be advocating for difference and leading on some of these more inclusive practices for the way that the design operates. We just need to empower those experts to be able to do something about it.
Baroness Bull: Thank you for clarifying that. The second half of the question, although it feels like a slightly different question, is around the difference between large and small organisations, and between privately funded and publicly funded organisations. In evidence from Martin Smith, we heard that bigger institutions such as the V&A and the Royal Opera House are better placed financially to pick up on the spillover from the games industry and to do this stuff.
We would all find that in the history of art innovation has very often been difficult in those big organisations because of the weight of history, stakeholders and expectations. Innovation happens at the outside and then comes in once it has proved to be successful. Jo, you are nodding your head. Is that the way you are seeing it: that we should be careful in assuming that the big organisations are going to take on the innovation, because actually we need to empower the little ones to do it?
Dr Jo Twist: Yes, absolutely. My observation is that, particularly during the pandemic, you were seeing a lot of cultural institutions trying to pivot digitally, which is probably what they should have been doing 10 or 15 years ago or more. It was actually the skill set that was really lacking. We need to empower the skill sets within those organisations. They do not necessarily have the skill sets. They might have the funding, but then it is a one-off project that lives for a bit around that exhibition or that moment and then disappears.
That is important. I keep asking where our metaverse strategy for the cultural industries is. Where is our cultural and digital asset bank? You are going to hear from witnesses. I wish I could hang around for that bit. I will watch; I will do a catch-up. Where is our digital infrastructure that includes skill sets, being able to bring in the R&D, but with a more sustainable approach to how we create these experiences? That is so that it is not just big institutions that might have the funding to do that, but small companies that are innovating, which might not be on anyone’s radar, that can be brought in and innovate.
Catherine Allen: To build on that quickly, this is an art form and communications medium in its own right; it is just so different. Often people who have a bit of experience in gaming, immersive theatre or film making can come to it with skills that really help. When a large institution that has already built up its heritage in a certain art form then says, “Okay, we’re doing immersive”, it can set it up as if immersive is an extension rather than its own thing. When I have seen the really successful examples, it is often when the creators have come to it fresh. The same applies to regulation and law. It is about seeing this as its own thing.
Verity McIntosh: I have a quick data point just to help frame where we are currently. The Immerse UK report identifies that, in the UK, 80% of companies specifically working on immersive are micro-SMEs, with between one and nine employees. We are seeing the dedicated and focused work on immersive being done by small, agile companies that can exploit R&D quicker.
Baroness Bull: There is a real question about how that becomes integrated into the organisations in a way that bridges the points that Jo and Catherine made there. Thank you.
Q36 Lord Lipsey: On the point about 80% being SMEs, if you actually look at the total value of the industry, how much are the SMEs as a value? In most things you get lots of very small organisations and a few big ones that are dominant. Is that true in this case?
Verity McIntosh: It is a good question. It is quite a difficult one to get data on. The UK has certain larger companies at scale such as Framestore, which has been operating in this space and has come from more of a film and television background; it has moved into this very quickly and is proliferating. So yes, to an extent.
One of the things that we noticed was that there was a massive hype cycle around 2016, and a lot of companies set up and grew very quickly and took on lots of employees. As that hype cycle settled, a lot of companies strategically started to work with their freelancer networks more than having this bloated staffing pool, because they could not necessarily rely on consistently available investment and commissioning, but also because there is this incredibly prolific network of micro-SMEs within the UK that are highly specialised. It seems like even the big companies, because they work in these emerging territories, are choosing to hold a certain amount of expertise at core and then look for those micro-specialisms in the freelancer network and in small company networks.
Q37 Baroness Featherstone: I will start by declaring an interest in that my daughter is a gamer and has been for 20 years, and now is writing the narrative for a big new game. Her partner composes music for the games industry. When you talk about talent, there is infinite opportunity amongst the creative, but I do not see the pipeline myself. That is just a point I wanted to land.
This really goes into how others are doing around the world. There is significant projected growth in this industry. Countries elsewhere seem to be making dynamic and large investments to facilitate that growth. My understanding is that here we are not properly capitalising on the opportunities, and that there are difficulties in scaling and with skills shortages. I would like you to talk about how internationally competitive the UK’s current position in this area is, and what the risks are to our future success.
Catherine Allen: Speaking to people working in the sector, such as creatives and founders of start-ups in the space, one strength that we have is that there have been quite a lot of small pots of R&D money around that have had quite an impact on the sector and its growth. As you say, the next step is that scaleability. You have something. You have made some content that you are really proud of. You want to get it to the audience beyond a bit of user testing with your friends. That is where it is really hard to get that funding for that next step. There has been lots of this push to get things going, but then what do you do next? When you go to private investors, if it is at seed level, and they say, “I don’t really have the experience in that. I don’t feel confident investing”, it can feel like a serious barrier to that next step.
We saw a real opportunity in our own venue, and then seeing other organisations as well where there is a significant demand. People really want to experience this content. Ideally, a queue is not the best form of ticket management, but people will go through long queues to experience some immersive content. However, it is strange that, when looking at the funding opportunities available in 2018 or 2019, there were predominantly these small R&D pots.
If we are not careful, looking from a funding policy perspective, public money could keep going into “another cool R&D project”, and these really talented people may actually leave the immersive sector due to a lack of career development, taking those skills elsewhere. That is ultimately a waste of that great content and expertise, so supporting and stimulating the next stage would be fantastic.
Dr Jo Twist: I completely agree with that. It is the scale-up. It is either go big or go home, and that is the funding gap. For the games industry, where a lot of this innovation is, and which of course combines the excellence that we have in the UK in creative industry storytelling, as well as audio design and so on, with technology industries, a lot of companies are struggling to get to that next level. A huge breakout hit can be exported globally by a team of 10 people but that is quite rare, so it is really difficult.
Incentives such as the creative enterprise funding for the scale-up programme, which we partner with Creative UK on, are fantastic, because they are giving those businesses that leg-up for free. It is accessible. We really focus on getting diverse leaders of those businesses to hone their teeth and take the opportunity, but we are facing stiff competition. Countries such as Germany, Australia and Ireland have consulted with us and looked at the games industry’s success over the last 10 years and how that has affected immersive industries generally. They have looked at our video games tax relief, they have looked at the R&D tax relief and they want the same, and they have created the same but with better rates.
We still have the talent, but we are in that competition with fintech, which is offering insane salaries for graduates out of particular courses, which is just impossible for a lot of SMEs, in particular, to keep up with. We are in a really favourable position. We are concerned that we will not remain in that favourable position, so we would like to be able to protect that position and make sure that we remain more competitive and the envy of the world, because that is what we are.
Baroness Featherstone: What would be the thing you want done?
Dr Jo Twist: Speaking from our perspective, the tax relief for all the screen industries is incredibly valuable. For the games industry, it has been essential for that growth over the last 10 years, and it has been essential to then leverage that investment that has happened into the games industry. The growth of those companies then means that they have been acquired.
We want to see more companies coming through the ecosystem that are retaining their British-owned IP in this country and collaborating with others. We want to see that protected, but we also need a serious injection of skills investment and support. We do not have the right combination of people who have arts and humanities expertise combined with computer science and computational thinking. Those are the critical skill sets of the fourth industrial revolution if we want to maintain our globally competitive position.
Verity McIntosh: I agree 100%. In terms of what we need, this has been discussed in previous sessions and so I know we are aware, but there has been such a damaging attitude to the value of arts subjects at higher education at all levels, and mass disinvestment in arts and humanities learning at university level. That is the bit that I am involved in most, so I see it very profoundly, but it has a massive knock-on effect for things such as parent confidence for where they are going to allow their children to study.
There have been so many toxic narratives in recent years about not studying something that will not have this certainty about becoming a doctor or lawyer. If there is one thing that we can do to counter that, it is illustrating that my graduates, who are absolutely in that middle space between arts and creativity and technology, are so employable; they are ridiculously employable. They cannot fend off offers quick enough. It is a massive opportunity for our graduates, particularly when they have the opportunity to do that STEAM thing, where they can meld science and technology with artistry. It makes them absolute unicorns in their field. If we continue to presume that encouraging our young people into the arts is somehow discouraging them from productive careers, we are kidding ourselves. We need a reversal of that narrative.
There are plenty of academic marketplaces that are providing STEM graduates. There are some fantastic examples of how Asian markets in particular are really investing in their science and technology graduates, and they are proliferating in all markets. Historically, the difference from the UK sector has been that we have been able to give these really well-rounded polymath people the opportunity to develop their skills, not just in one sector but in these convergent spaces. Arts and technology are so well matched in the UK right now, but increasingly I am finding people come in quite nervous about whether they are taking a risk by investing in their own creativity. We have to tell them that it is worth it and we have to mean it.
Baroness Featherstone: That would be the key message.
Verity McIntosh: It is the one from me, yes.
Dr Jo Twist: Polymaths are the future.
Baroness Featherstone: Yes, we heard.
Q38 The Chair: In terms of the jobs that are available to people who have the level of skills, training and qualifications that you have described that are now becoming so short, because the education opportunities are not there for them, can you bring this to life? We hear this message, but what sort of jobs could graduates who qualify in the way that you would like them to be walking into that they are missing out on?
Dr Jo Twist: We have a huge shortage of technical artists. There is a huge need in our immersive industries, our video games industry and our virtual production industry, which is nascent but growing in the UK. Technical artists are on the shortage occupation list, as well as AI programmers, level designers and analysts, who are taking in, understanding and feeding data back into how an immersive creative product is experienced. It is not the same product design as these things.
Those are the skill sets, but the challenge that we all face is that these jobs do not exist yet. If we are looking at what we need to grow the sector, these are jobs that simply do not have names yet, but those are some of the typical kinds of jobs that we are really struggling with filling.
The Chair: Am I right in understanding what you are saying when we look at the competition, particularly from the Far East but also, as you have already said, Germany and closer to home in Ireland? I am generalising here, but in the Far East their focus on the technical aspect of training is what is, at the moment, putting them out in front of us, because we do not have enough of that, but what they are not doing is the art, and we could steal back an advance if we were able to combine these two things.
Dr Jo Twist: From my experience, that tends to be the story that we hear, as well as from territories like the Indian continent, where computer science skills might be really strong, but that curiosity, that storytelling, the humanities, and the arts and cultural skill set that you combine with computer science are not quite there yet. That is our opportunity. In Australia, Germany and Ireland, they are really focusing on the financial incentives and tax reliefs.
Q39 Baroness Bull: I just want to check what Verity said and match it with something that Jo said. You talked about people fending off job offers, and you talked about jobs that do not exist yet. I suspect that both are true, but what you might have been saying, Verity—correct me if I am wrong—is that the overlapping technical, creative and problem-solving skills that your students are getting have an application both within but also beyond the creative industries, the creative economy and, indeed, the broader economy. Is that what you were saying?
Verity McIntosh: It is a little bit of both. We are seeing a lot of our graduates going into the creative industries and making really significant waves internationally in terms of the media and entertainment space and the arts and cultural space. You are quite right that one of the things about immersive technologies is that they are permeating almost all verticals. A lot of our students are going into training and simulation, virtual education, architecture and various industrial contexts that are picking up these tools and technologies. A number are going into gaming. There has been a massive explosion in haptics and gesture-based interfaces that, again, they are incredibly well suited to work within, because they understand interaction design as well as the technologies that underpin them.
We are seeing a proliferation across different market sectors, but I would say that a significant number of them are moving directly into the arts and cultural sector and trying to make change in that space.
The Chair: Thank you very much. It has been a fascinating session. We are very grateful to you for your time and for your clear evidence. I do not normally comment on things like this, but it is quite interesting that, on a topic such as this one, we have three women in front of us. I did not want that to go by without acknowledging it; we did not deliberately do that, but it is impressive. All of three of you have been very impressive witnesses and I am very grateful to you. Thank you very much.
